Charter Communications, Inc. (CHTR) Will Not Implement Data Caps


In the proposed merger of Charter Communications, Inc. (NASDAQ:CHTR) with Time Warner Cable Inc (NYSE:TWC), the new company known in the filings as  ‘New Charter’ has committed to not implement data caps, or usage-based billing, neither of which Charter currently engages in.  The news came as apart of a public interest statement which promises to go beyond the FCC’s new Open Internet rules by agreeing to a legally enforceable condition for the new combined company.

The move is made not just for the approval of the Charter – Time Warner Cable merger, but to head off even more onerous regulations for the cable company.

No Data Caps

The primary reason is that there is no cap on data and usage-based charges. Additionally, there would be no rental fees for modems.  Charter Communications, Inc. (NASDAQ:CHTR) has never been implicated in violating network-neutrality rules. The company’s slowest broadband offering of 60 Mbits  is considered great for online TV. The company also has no-cost interconnection policy meant for Internet backbone firms.

However, once the company merges with Time Warner, the merged entity will become four times bigger. At that point of time, the commitments of the merger will come in to play its part. Charter has filed a legal application with FCC making it point clear that the merger will ultimately benefit the public. The cable firm offered several commitments that are enforceable legally. The regulator will review the application and the commitments, which is likely for the next six-month period, besides public input on the matter.

Accepting All Orders

Charter Communications, Inc. (NASDAQ:CHTR) has never had a problem in accepting all orders in respect of the interconnection mandate and bright line rule. As a result of the FCC’s bright-line rules and interconnection mandate, some of the companies like Netflix, Inc. (NASDAQ:NFLX), Cogent Communications Holdings Inc (NASDAQ:CCOI) and Level 3 Communications, Inc. (NYSE:LVLT) were said to have been affected.

The FCC was urged to slap a ban on zero rating in every form. However, the regulator refrained from banning the zero rating. But, Cheater appears to be in favor of it. That means that the company will not commit caps on data or usage-based billing.

Agreeing To Conditions

The company has agreed to the conditions due to the merger for the duration of three year period. That is longer than the conditions imposed on Verizon Communications Inc. (NYSE:VZ), as well as, AT&T Inc. (NYSE:T). However, the duration is shorter than the Comcast Corporation (NASDAQ:CMCSA) – NBC condition.

The new conditions go further than previous agreements and are meant to appease the FCC and Open Internet rules. The company is taking preemptive actions to avoid the wraith of regulators and set the bar on its own terms.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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